The influence of neighbors in technology adoption: evidence from farmers in Pakistan and Malawi

textThis dissertation analyzes the importance of economic and information related barriers to technology adoption, with an emphasis on the role of interpersonal information exchange among social and physical neighbors. The two studies that make up the dissertation are based on the IFPRI Pakistan Panel Survey, 1986-91, and the Malawi Integrated Household Survey, 1997-98. Our research attributes communication or information factors for the slow adoption of new high yield variety (HYV) wheat seeds in Pakistan, and economic or production constraints for the slow adoption of hybrid maize seeds in Malawi. In Pakistan, the usual economic or production related constraints do not appear to hinder adoption since capital requirements for the new technology are only modestly higher. Rather, the slow adoption of new HYV seeds is attributable to a paucity of reliable information regarding the subtle advantages of the new technology. Conversely, in Malawi, the new hybrid maize seed technology is starkly superior to the previous technology, and though farmers are cognizant of these conspicuous differences, they lack the capital to make the conversion. The Pakistan study shows that farmers’ attitudes toward the adoption of new HYV wheat seeds are inter-dependent. Interestingly, farmers appear to be more strongly influenced by their social peers rather than physical neighbors. Social peers are defined as farmers within the same village who share similar economic and social standing, i.e., belong to the same land ownership group. However, there is no evidence of such learning externalities across farmers in different socioeconomic (land ownership) groups. This segregated communication network can potentially lower economic productivity – farmers communicate less across socioeconomic classes contributing to the slow diffusion of new productivity-enhancing technologies. Since the local societal setup in Malawi does not lend itself to a socioeconomic definition of neighbors, the Malawi study focuses on physical neighbors only. We find that physical neighbors likely do not strongly influence household adoption decisions in Malawi. Our findings are consistent with the contrasting agricultural environments in Pakistan and Malawi and reflect the different stages of agricultural development and the distinctive characteristics of the new technologies introduced in these two countries.LBJ School of Public Affair